Axis Financial institution shares gained practically 3 per cent on Thursday to hit Rs 1,202.30 within the early buying and selling session, after the lender’s September quarter (Q2 FY26) outcomes drew sturdy reactions from main brokerages.
Regardless of a pointy fall in revenue on account of one-time provisions, analysts see enhancing core efficiency and stay largely optimistic on the inventory.
The financial institution reported a 25.3 per cent year-on-year decline in consolidated internet revenue to Rs 5,528 crore, impacted by a Rs 1,231 crore RBI-mandated provision on discontinued crop mortgage merchandise.
On a standalone foundation, revenue stood at Rs 5,090 crore, down from Rs 6,918 crore a yr in the past.
Nonetheless, Axis Financial institution delivered 12 per cent mortgage development, regular margins, and a decline in unhealthy loans, which helped offset a number of the impression from increased provisions.
Internet curiosity earnings (NII) grew 2 per cent YoY to Rs 13,745 crore, whereas internet curiosity margin (NIM) stood at 3.73 per cent, barely decrease than 3.99 per cent a yr in the past.
Chief Monetary Officer Puneet Sharma mentioned margins are anticipated to backside out in Q3, assuming no additional price cuts by the Reserve Financial institution of India.
Asset high quality improved with the gross NPA ratio easing to 1.46 per cent from 1.57 per cent within the earlier quarter.
Learn Extra: Axis Financial institution Q2 FY26 Outcomes: Internet revenue falls 25% YoY to Rs 5,528 crore; NII will increase 2.2%
Brokerage Bullish Regardless of Loss
Brokerages stay bullish on Axis Financial institution regardless of its Q2 revenue decline as a result of the autumn was primarily on account of a one-time ₹1,231 crore provision on discontinued crop loans, not an indication of enterprise weak point.
Analysts say the financial institution’s core efficiency stays sturdy, with wholesome mortgage and deposit development, steady margins, and enhancing asset high quality. The web curiosity margin slipped solely barely, and slippages moderated, exhibiting higher credit score management.
Many count on the one-off provision to be reversed within the coming quarters, boosting earnings.
With valuations nonetheless affordable and development visibility enhancing, brokerages like Jefferies, Nomura, and HSBC proceed to keep up their purchase rankings, calling the revenue drop a short lived setback in an in any other case regular development story.
Right here’s what prime brokerages mentioned:
Jefferies maintained a purchase ranking, elevating its goal value to Rs 1,430 from Rs 1,370. It highlighted better-than-expected NIMs, double-digit development in loans and deposits, and moderation in slippages as positives.
Nomura additionally maintained a purchase name, lifting its goal to Rs 1,440 from Rs 1,400, citing “sturdy operational efficiency” regardless of one-off provisions.
HSBC reiterated a purchase with an upgraded goal of Rs 1,460 (from Rs 1,340), noting “very sturdy leads to mortgage development, margins, and asset high quality,” and calling the earnings inflexion “seen.”
CLSA stored an accumulate ranking with a goal of Rs 1,400, stating that the quarter marks a “development shift” with enhancing development and decrease slippages.
JPMorgan maintained a impartial stance with a Rs 1,260 goal, citing increased provisions on crop loans as a drag.
Bernstein maintained outperform, with a Rs 1,250 goal, saying credit score prices stay elevated however are more likely to reverse within the coming quarters.
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